Monday, October 28, 2013

An Interesting Little Twist on Adaptive Management

For many years, adaptive management has been all the rage.  The basic concept is appealingly, if deceptively, straightforward: when we take actions that will have environmental consequences, we should monitor those consequences, learn from the monitoring, and adjust our actions based on what we learn. 

That seems eminently sensible, but in practice, adaptive management has often proven challenging.  There are many reasons why, but one of the most important is that the requisite monitoring is often missing.  There are financial disincentives to monitoring; it can be expensive, and money spent on monitoring is money not spent on other forms of environmental protection, or on other priorities.  And there are institutional disincentives.  If monitoring reveals the need to change course, that can be embarrassing to the decision-makers who selected the initial strategies, as well as frustrating to people who have relied upon those strategies.  As a consequence, monitoring is often shortchanged, and adaptive management programs often fail to involve much adaptation.

Recently, I stumbled upon a document that describes an innovative way of dealing with this incentive problem.  A group of federal and state agencies recently developed a guidance document entitled Determining Appropriate Compensatory Mitigation Credit for Dam Removal Projects in North Carolina.  As the title suggests, the intent of the document is to provide guidance to people (including mitigation bankers) who compensate for stream fill projects by removing dams.  That’s intriguing for a lot of reasons, and one involves the links between monitoring, offset ratios, and adaptation.

A little background should put that in context.  When regulators allow a permit recipient to use off-site mitigation to compensate for a project’s on-site impacts, they often use something called an offset ratio.  For example, a developer might be obligated to restore four acres of habitat in return for developing one acre.  Or a mitigation banker that restores four acres of wetlands might receive one acre of credits to sell.  The ratio is designed to compensate for a number of factors, including the temporal delay between the destruction of one area and the restoration of the other and the pervasive uncertainties about whether restoration projects will achieve lasting success. 

Like most mitigation programs, this guidance document contemplates using that approach.  But there’s a twist.  For credits generated by restoring the stream reach above the dam:

The applicant can select a predetermined amount of credit or conduct research that will better determine the extent to which anadromous fish are using the newly accessible habitat.  If the applicant can satisfy the Research Option criterion, it may be possible to receive mitigation credit exceeding the amount given with the predetermined option.

In other words, you can get extra credit if your monitoring demonstrates that the project succeeded (if your monitoring reveals that the predetermined ratio was excessively generous, however, your initial credit does not get revoked, though hopefully the agencies would use that information to inform mitigation ratios for future projects).  Implemented carefully, this approach could be a useful incentive to perform monitoring, or an effective way to compensate for the absence of monitoring.

There are obvious potential pitfalls.  The approach only works if the predetermined option is conservative.  Otherwise there will be limited incentive to monitor, and the environment also may come out on the losing end of too many deals.  It also only works if the researchers strive for objectivity, which may not be easy to do, particularly if they get their paychecks from the same entity hoping to claim an enhanced credit.  Accordingly, some sort of third-party monitoring system might be appropriate.  But those challenges, though real, seem manageable, and the concept therefore holds promise for addressing some of the perverse incentives that can limit adaptive management.

- Dave Owen

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